Marketers lack understanding of lead generation and how to deploy it

There is a lack of understanding among marketers about the definition of lead generation and how to deploy it, research from the IAB has revealed, despite the sector growing by 20% in the first half of 2011.

While the majority of the 125 marketers polled understood how it can increase a customer base, 52% believe they are not using it in the most effective way.

Despite this, 33% of respondents allocated more than £100,000 to lead generation in 2011, with 40% saying they will increase their budget in 2012.

Disparities stretch from defining ‘lead generation’ and what budgets to allocate to it, to understanding what makes an effective lead generation campaign. Almost half described it as ‘database building’ (49%) or ‘customer generation’ (48%).

Email (49%), natural search (46%), pay per click (44%) and affiliate marketing (30%) were found to provide the most leads.

The research showed that retail, finance and travel are the top spenders, while FMCG, telecoms and luxury brands were among those who are under spending.

Trine Buus, chair of the Lead Generation Council, said: “Online lead generation is proven yet misunderstood, so addressing this issue in 2012 is the Council’s primary focus. There’s a long-term educational challenge and the council will continue its mission of publishing educational materials that help marketers understand the benefits, opportunities and effectiveness of lead generation tools.

“Worth mentioning is the industry’s perception of ROI and pricing which needs to be seen in perspective to lead quality, conversion mechanisms, tools and channel mix.

“Personally, I’m also pleased to see the understanding from advertisers of creative effect as the inventory sources are opening up on exchanges and call to actions are key to gain user interest.”